Citgo and Joseph P. Kennedy: Hugo Chavez's Agents of Influence


Citgo and Joseph P. Kennedy: Hugo Chavez's Agents of Influence

Jan 23rd, 2008 3 min read
James M. Roberts

Research Fellow For Economic Freedom and Growth

James M. Roberts' primary responsibility is to edit the Rule of Law and Monetary Freedom sections of Index of Economic Freedom.

By now practically everyone in the Midwest and Northeast has seen the TV ads. A series of heart-rending scenes show low-income American families gratefully receiving discounted home heating oil as a gift "from Citgo and the people of Venezuela." The gift-giving intermediary? Former Rep. Joseph P. Kennedy II, founding chairman of Citizens Energy Corp.

The favorable media exposure that Venezuelan President Hugo Chavez is buying for Kennedy would be worth millions if he runs again for public office. His uncle, Sen. Edward M. Kennedy (D-Mass.), has been in the U.S. Senate since 1962. Chavez is also using the ads as part of his public relations campaign to influence the American people to look more favorably upon Venezuela and the oil and power his regime controls.

Citgo is owned by Petróleos de Venezuela, S.A. (PDVSA), the state-owned oil company controlled by Chavez. Any reasonable observer would have to conclude that the "JOE-4-OIL" advertisements and discounted heating oil program are very political.

In one ad, Kennedy accuses the U.S. government of cutting the federal budget for heating oil assistance while a picture of the White House floats in the background. The placement of the ads also appears politically motivated. How else to explain, for example, why the ads are running on "Meet the Press With Tim Russert" and "FOX News Sunday with Chris Wallace," shows for savvy political insiders that presumably have few viewers that qualify for heating oil assistance?

Foreign agents are required to register under the U.S. Foreign Agents Registration Act (FARA). There are criminal penalties for non-compliance with FARA, but they have rarely been imposed. It is interesting, however, that one of the few prosecutions occurred recently, and it involves Chavez.

In December 2007 a Uruguayan and three Venezuelan nationals were charged by federal prosecutors in Miami as being unregistered foreign agents. They were implicated in another Chavez influence-buying scheme uncovered when $800,000 in cash from PDVSA stuffed into a suitcase at a Buenos Aires airport spilled out in August 2007 during the presidential election campaign in Argentina.

Chavez boasts of his hatred of the United States. At the United Nations he called President Bush "the devil." He funds efforts throughout Latin America whose sole aim is to weaken U.S. power and influence in the region, while he simultaneously works hand-in-glove with Iran and our other enemies and competitors.

The "JOE-4-OIL" ads skip over the prominent role Chavez has played to intimidate OPEC to reduce oil production to raise prices, an act that hurts the poor first and foremost.

The poor in the United States are well-off by Venezuelan standards. Robert Rector of The Heritage Foundation noted in a recent report that "97 percent of poor [U.S.] households have a color television."

By comparison, the large numbers of people living in poverty and extreme poverty in Venezuela ought to be an embarrassment for Citgo and Kennedy. After Chavez's eight years in office and the receipt of more than $600 billion in oil revenues, Venezuelans at all income levels are no better off.

Crime, corruption, inflation and food scarcities are rampant. The average per capita income in Venezuela is less than one-sixth of America's and millions of Venezuela's extremely poor earn less than $1 a day.

So the 112 million gallons of heating oil Citgo is selling at a 40 percent discount to relatively wealthy Americans under the Citgo/Kennedy program means that Chavez is denying the poor in Venezuela $150 million in lost Citgo revenue - all of it spent to purchase political influence for Chavez and Kennedy.

It's a disgrace that Chavez is using the resources of the Venezuelan people in a shameless self-promotion campaign that has not been disclosed publicly. The American people, not Joe Kennedy, should decide based on an examination of the facts whether "the people of Venezuela" actually want to provide the discounted home heating oil or whether (as is more likely) they were not even consulted about it.

The American people must understand that, while a handful may reap some benefit, ultimately our nation could pay a very high price for this heating oil due to the growing security threat from the wealthy Chavez regime, which is being empowered by influential friends in the United States.

James M. Roberts is a research fellow in economic freedom and growth in the Center for International Trade and Economics at The Heritage Foundation.

First appeared in Fox